As the senior debt lenders have become more cautious, mezzanine development finance is now being utilised more than ever to enable developers to put in the minimal amount of equity into a project. With competition high, it has encouraged many new entrants to launch into the market and challenge for market share through offering cheaper interest rates, more flexibility and higher leverage. Mezzanine finance gives developers a chance to improve their cash flow and even kick-start additional development projects.
Mezzanine funding is ideal for covering the shortfall between our clients’ cash input and their senior debt finance. Combining mezzanine development finance and senior debt can often secure a lower blended rate than would normally be achieve with a single lender on a stretched debt development basis. Not only can it give a lower blended rate, but it can often mean a higher overall leverage for development finance of up to 85% of GDV and up to 100% of total costs.
At LDNfinance, our experienced development finance brokers can also assist in securing what is often referred to as stretched mezzanine or super mezzanine development finance. This may be beneficial if you’re a property developer looking for maximum leverage for a project but without investing into the scheme. These arrangements allow for an additional layer of finance to be extended further to enable the funding package to be put together, without the need for profit share splits with investors.
Get swift lending decisions on mezzanine finance applications
LDNfinance boasts an extensive panel of family offices, specialist and private lenders with an appetite to provide mezzanine development finance for a range of residential and mixed-use projects. Over the years, our trusted relationships with these lenders has enabled our brokers to secure finance at competitive rates. Most importantly, we work with clients to prepare and present mezzanine finance applications to ensure a swift and decisive answer from our targeted lenders.
Each mezzanine development finance opportunity is assessed and negotiated on its own merits. At LDNfinance, we understand that no two clients are the same and we take time to sit down and understand your unique financial circumstances. This enables us to pinpoint the most suitable lenders with the capabilities to offer the most attractive funding solution for you.
Let’s discuss your next mezzanine development finance opportunity and arrange a bespoke finance arrangement that works on your terms.